S&P Global — 4 September 2024
Daily Update: September 4, 2024
Bumper Corn Crop in US Moves Global Grain Markets
By Nathan Hunt
Start every business day with our analyses of the most pressing developments affecting markets today, alongside a curated selection of our latest and most important insights on the global economy
Favorable weather in the US and Brazil, combined with unfavorable conditions in other corn-growing regions, has reduced global prices for corn and changed the flow of corn exports. According to S&P Global Commodity Insights, US projected corn yield jumped to a record 183.1 bushels/acre in August, up from 177.3 bushels/acre a year earlier. Increased yields have created a supply glut, driving US corn prices down to $179.72/metric ton, the lowest price since September 2020. Brazilian corn prices also fell to their lowest level in years at $194.67/metric ton.
The US and Brazil dominate global corn production, together contributing over 107 million metric tons of corn in marketing year 2023–24 (September-August) out of a global total of 201 MMt.
China is the world’s largest importer of corn, but sluggish domestic demand is pushing down corn prices. Chinese imports are forecast to stay steady at 23 MMt during marketing year 2024–25.
The big change for China will be a sharp reduction in imports from Brazil and a corresponding rise in imports from the US. China is expected to increase its corn imports from the US by 67.6% year over year in marketing year 2024–25 while reducing its supplies from Brazil by 48.8%. This is projected to be a one-year aberration in trade patterns based partly on the price differential between US and Brazilian corn. In the longer term, China is forecast to prefer Brazilian corn. Brazil is expected to mitigate the impact of reduced trade with China through increased domestic corn demand for ethanol, the use of which is projected to be up 19% from a year ago.
Dry weather in July in Romania, Bulgaria and Ukraine is predicted to drive up local corn prices. Irrigation is less common for cornfields in Eastern Europe, and a series of days with temperatures surpassing 30 degrees C are projected to lead to a 10%-15% decline in production. With higher prices and lower supply, Ukraine is expected to have lower exports to frequent customers such as Egypt and Spain. The US and Brazil are expected to be the primary beneficiaries of this shift.
Today is Wednesday, September 4, 2024, and here is today’s essential intelligence.
Listen: The Rise Of The ESG Controller In The Sustainability Talent Landscape
After the US’ Labor Day weekend, the ESG Insider podcast turns its focus to the topic of jobs. Specifically — how is the talent landscape changing for ESG and sustainability professionals? To learn more we speak to Ellen Weinreb, founder of Weinreb Group, a boutique recruiting firm focused on ESG and sustainability candidates. Ellen points to an increasing focus on compliance, data governance and regulation, which she says is leading to a “big rise” in ESG controller roles.
—Listen and subscribe to the podcast from S&P Global Sustainable1
US Stocks Primed For Renewed Bull Run After Early August Volatility
US equity markets are primed to stretch a bull run into September after recovering from a sell-off that sparked volatility in early August, an event that likely served as a necessary reset following a red-hot July. The S&P 500, Nasdaq Composite and Dow Jones Industrial Average indexes respectively lost 7.90%, 12.30% and 3.75% in value from July 16 to Aug. 5. The group of seven mega-cap technology stocks — collectively known as the Magnificent Seven — lost a combined $1.319 trillion in market capitalization, or about 9%, from July 31 to Aug. 5. However, the dip was short-lived, as each of the three indexes regained their losses by mid-August and have resumed a general rise.
—Read the article from S&P Global Market Intelligence
Mainland China, Hong Kong Private Equity Investments In Western Markets Surge
Capital deployment by mainland China- and Hong Kong-based private equity investors into the US and Europe, including the UK, has swelled this year even with tighter US and European government scrutiny of Chinese inbound investments. The aggregate transaction values reached $11.05 billion in the year through early August, a significant increase compared with full year 2023, which recorded just $5.92 billion, according to data from S&P Global Market Intelligence.
—Read the article from S&P Global Market Intelligence
Economic Research: Slow-Motion Shakeup? Asia's Role In Global Supply Chains Is Slow To Change
The headlines would suggest a production exodus from China as global supply chains shift. Yet China's share of global imports is higher than it was six years ago. S&P Global Ratings’ analysis of exports and inward foreign direct investment patterns shows that this will be a slow-motion shakeup. This is not to say that relocation isn't happening. In recent years, unfavorable experiences during the pandemic, rising geopolitical tensions and new trade barriers and industrial policies have motivated many firms to reassess their global supply chains. In particular, their China operations.
—Read the article from S&P Global Ratings
Global LNG Market Still Remains 'Fragile' Ahead Of Winter: Analysts, Traders
The global LNG market is bracing for a potentially strong winter this year into early 2025 as bullish signals from the waterborne cargo market and vulnerability to supply side shocks heighten sentiment, according to traders and analysts at S&P Global Commodity Insights. Prices have cooled since the record highs seen post Russia's invasion on Ukraine as Europe's rapid build out in LNG infrastructure and increasing supply in the global LNG arena helped to subdue market volatility.
—Read the article from S&P Global Commodity Insights
Listen: MediaTalk | Season 2 | Ep. 28 - Broadcasters Prepare For Political Ad Spending Blitz After Conventions
With August winding down, it is time for college football. MediaTalk host Mike Reynolds joins three S&P Global Market Intelligence Kagan analysts to talk about the 2024/25 college football season, which has a number of major changes, including conference realignments and a 12-team College Football Playoff. Together, they talk about the demise of the Pac-12, the expansion of the Big 10, the dominance of the SEC and the chances for the ACC. It promises to be a wild year with big rights fees, big ratings and big stories.
—Listen and subscribe to the podcast from S&P Global Market Intelligence
Webinar: The Path To Unlocking Value In Your ESG Reporting Journey, Featuring Novisto (Sept. 10, 2024)
Capital markets, regulatory bodies, employees, third-party data providers and customers alike are increasingly seeking transparency from companies on their performance in managing environmental, social and governance (ESG) issues. The time is now to get ESG right and own your narrative for important stakeholders. Join our upcoming webinar where our experts will discuss the importance of quality ESG data collection/management.
—Register for the webinar from S&P Global Market Intelligence